With more than half of US imports now covered by trade deals, the industrial sector is poised to benefit from diminishing tariff-related uncertainty, continued reshoring, and commitments of energy and defense investments and purchases, BofA Securities said in a note Tuesday.

Companies like Rockwell Automation (ROK), Parker Hannifin (PH), and Eaton (ETN) are positioned to benefit from a wider reshoring movement in US manufacturing amid decreasing tariff-related tensions and rising capital investments, the note said.

Exporters like Ametek (AME), Honeywell (HON), Emerson Electric (EMR), and Flowserve (FLS) are expected to experience fewer disruptions, given the relatively restrained retaliatory response from US trading partners, BofA said. Ametek derives 26% of its revenue from exports, with Honeywell at 13%, Emerson at 7%, and Flowserve also at 7%. according to the note.

The US recently reached trade agreements with the UK, Vietnam, Indonesia, the Philippines, Japan and the European Union, covering about 56% of US goods imports, BofA said.

The EU alone pledged to purchase $750 billion of US energy and make direct investments worth $600 billion, while Japan committed $550 billion in US investments alongside LNG offtake and defense procurement agreements, the firm said.

"With the bulk of North American imports covered under the US-Mexico-Canada Agreement, the largest remaining industrial trading partner remaining is China," BofA said.

BofA has a buy rating on Ametek, Eaton, Emerson Electric, Flowserve, Honeywell, Parker-Hannifin, and Rockwell.

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